Order to Show Cause Re Dismissal
Code § 1102.5 based on having reported HCCC's alleged mismanagement.
First Cause of Action: Breach of Public Contract and Retaliation A breach of contract claim requires that the plaintiff plead (1) the existence of a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) resulting damages. (CACI No. 303.) Where the claim is brought by a non-signatory, the plaintiff must additionally plead facts establishing standing to enforce the contract, either as a party or as an intended third-party beneficiary under Civil Code § 1559.
Plaintiff does not allege he was a party to the Grant Agreement between CDPH and HCCC; he alleges only that he was hired as a Peer Health Ambassador under the program the Grant Agreement funded. To enforce the contract as a non-signatory, Plaintiff must show he is an intended beneficiary under the three-factor test of Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817: whether he would benefit from the contract, whether benefiting him was a motivating purpose of the contract, and whether enforcement by him is consistent with the contracting parties' objectives and reasonable expectations. The Grant Agreement forecloses this showing on its face, expressly disclaiming any intent to create third-party rights or remedies. See Clemens v. Am. Warranty Corp. (1987) 193 Cal.App.3d 444, 452 (court may look to the parties to a contract attached to the complaint in assessing sufficiency).
Plaintiff's opposition does not dispute that he is a non-signatory or that the disclaimer exists; it instead argues that an indemnification clause running to CDPH establishes HCCC's liability to him directly. An indemnity obligation owed to the grantor agency does not establish a right of enforcement in a non-signatory third party, and Plaintiff cites no authority extending indemnity language of this kind to create third-party beneficiary status. Because the standing defect arises from the express language of an exhibit attached to the pleading, no further factual allegation can cure it. The demurrer to the first cause of action is therefore SUSTAINED without leave to amend.
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Second Cause of Action: Breach of Contract and Fiduciary Duty Regarding Grant Management This claim requires, in addition to the standard breach of contract elements above, that Plaintiff plead facts establishing a fiduciary relationship between himself and HCCC and a breach of the duties arising from that relationship.
As with the First Cause of Action, this claim is predicated on Plaintiff's enforcement of obligations arising under the Grant Agreement, to which he is not a party and under which he has no thirdparty rights. To the extent Plaintiff instead grounds this claim in HCCC's status as a nonprofit public benefit corporation holding grant funds in trust, enforcement of a charitable trust or a corporation's adherence to its charitable purpose is generally committed to the Attorney General. Gov. Code, § 12598(a). Leave to amend is denied because Plaintiff's relationship to HCCC as a former Peer Health Ambassador is not a fact subject to alteration by further pleading. The demurrer to the second cause of action is SUSTAINED without leave to amend.
Third Cause of Action: Breach of Fiduciary Trust A claim to enforce a public or charitable trust requires that the plaintiff plead either that the trust was created for their direct benefit or that they otherwise hold a recognized special interest sufficient to confer standing distinct from the general public's interest in proper administration of charitable assets.
Plaintiff's 4AC, and his opposition, characterize this claim as resting on the public's general interest 12